The Way to Safe and Secure Investing - Gold Is the Answer!

The first thing most financial advisors will ask a client is why they are investing. They will also usually how much time the client has before they think they will need the money. These two pieces of information will figure heavily in the kinds of investments a particular client is suited for.

When markets are volatile, and the standard advice doesn't apply as consistently as it used to, financial advisors will inform many of their clients about profitable opportunities to invest in gold. How does gold help an investment portfolio?

How Hedges Work

A hedge is a way for investors to protect their gains in the market. One way to think of hedges is to think of insurance. If a stock position increases in value by $1000, the investor will naturally want to keep that gain. They certainly don't want that same position to decrease by $1000 and wipe out their profit. So that investor might employ what is known as a hedge.

In the everyday world, insurance is a hedge. The purpose is to offset losses with accompanying gains. Futures contracts are one of the most popular hedges. Options are also a common way for investors to secure gains and try to avoid unnecessary losses.

One of the most powerful hedges is gold.

Gold as Insurance

Gold has always been a tremendously strong repository of value. Whether it is held in coins, bars or in other forms, gold maintains its value fairly consistently over time and also paces the rate inflation fairly closely, meaning that value stored in gold is likely to be far less vulnerable to the inflationary loss of buying power an equivalent amount in cash would be. These are some of the most profound gold investing factors for success.

When gold is established as a companion investment to a stock or bond position, or as a foundation-level position in a larger portfolio, it often will rise in value when other investments generally drop in value. Gold is considered a safe store of value, and demand for it often rises when other investments and classes of investments turn bearish. Gold is also very popular among currency investors who continuously look for profitable opportunities to invest in gold, as it provides a dual-strategy option of arbitrage against foreign demand and a hedge against exchange rate fluctuations, especially the currency native to the gold position.

Gold as Investment

Because it is a strong repository of value and is far less vulnerable to inflation, gold meets one of the most important requirements of a good investment. The other requirement is that an investment's gains exceed taxes. Because gold is a value store, it is generally not subject to the same kinds of taxes as a more volatile stock or bond portfolio might be. Until it is sold, a gold position is likely to face few taxes at all, and if it is incorporated into a tax-advantaged account of some kind, any gains may avoid taxes altogether or at the very least mitigate them.

Avoiding loss of value through taxes and inflation is another of the many gold investing factors for success. Gold is not a growth investment per se, and it is not likely to produce dividends or regular payouts like a bond or a mutual fund might. What it does provide is consistent safety. Its very presence is an automatic hedge against riskier positions in other markets.

A Path to the Future

Gold has been a good investment for thousands of years. It is now used in a wide variety of high-technology manufacturing processes, and mining technology has never been more advanced. Anyone looking for a good way to build a safe store of value for their family and legacy would be well advised to consider putting at least a portion of their investments into gold. It is one part of an overall strategy for wise investing.

 

Gold, One of the Safest Ways to Invest

The precious metals market has always been one of the best ways to invest for virtually every investor. Gold stands at the head of the precious metals market as the most covered and easiest investment to get into. Here are just a few of the ways that gold can protect and build your wealth.

- There are more ways to invest in gold than many other kinds of securities.

The safe-haven investor is made even more safe because of the many ways that there are to invest in the metal. This ensures a high volume on the metal, and the high volume in turn secures a more stable price for the investments of everyone.

You can invest directly in gold bullion in most countries; however, you will need a professional partner in order to protect your investment from the government. If you do not feel like going through this hassle, then you can invest in many derivatives of gold such as exchange traded funds and mutual funds that include gold. These investments may be slightly off of the true value of gold; the derivative investments tend to be affected by the short term attitudes in the market more than gold bullion direct investments. All of these investments are still safer than other securities because they respond much less to short term movements in the market.

In order to decide between the ways to invest in gold, you should consult a professional financial advisor whom you trust. If you want to protect and build your wealth, then you must be sure that you deal with an investment that is within your budget as well as the one that is right for your portfolio.

- The safe-haven investor invests in gold for the long term.

If you are looking for investment that you can keep for a while without having to monitor it, then gold is definitely the investment for you. Most people do not have the time to look over their investments on a day-to-day basis. However, the only investments that truly make money outside of the precious metals market require a great deal of personal management in order to succeed. You get the best of both worlds when you invest in gold - the safety of a precious metal along with the ability to create wealth for yourself while saving time.

- Gold can maintain your portfolio even when the market is going down.

One of the main reasons that people invest in gold is the ability of the precious metal to maintain value and even go up in value during a bear market or recession. Gold is usually the investment that people look to when the dollar is falling. This means that you can actually reverse some of the negative effects of a recession including higher interest rates and a higher cost of living. Once the recession is over, precious metals tend to retain their value. This means that you do not have to sell your holdings once the recession is over - you can keep them as an addition to your net worth.

As one of the safest ways to invest, gold is quickly becoming a staple in the portfolios of many people. In order to get the most value out of the investment, you should start to invest in the product before people begin to truly understand what gold does. Once the general public is made aware of the true nature of the precious metals market, those people will likely flood the market and drive up the price. If you get in ahead of them, then you will reap the benefits of your good decision without having to pay a premium.

Try to invest in gold at a basic level if you can. The upfront cost of time that you will have to put in for bullion is well worth it. You will get the safest investment of all gold investments.

 

The World Is Addicted to Debt

Was the 2007 to 2008 financial crisis the equivalent of a foreshock - an earthquake that, at the time, seemed like the Big One until, that is, the real and substantially larger earthquake brings massively more destruction days or weeks later?

Based on what has transpired in recent years, it would certainly seem that the Global Financial Crisis was just a taste of what's to come.

The world is more deeply indebted today than it was back then. Too-big-to-fail banks are even bigger today. And central bankers for the world's key countries have little firepower left to confront a new financial crisis.

We are now officially on our own. Buy gold!

Earlier this year, global consulting firm McKinsey & Co. issued a report on the 20 most-indebted nations. The numbers are shocking.

Just below the top 20 nations we have Canada at No. 21 with debt-to-GDP at 221%... Australia at No. 23 with 213%... and Germany at #24 with 188%. The most prudent Western nation is tiny Slovakia at No. 27 with 151% debt to GDP.

Overall, global debt now sits right at $200 trillion - nearly three times larger than the world's entire economic output in a given year.

That is not a sustainable number.

A Future of Defaults?

Just about the entirety of the West is in a bad way with debt, given that most economic research concludes that debt ratios above 60% are debilitating and, ultimately, disastrous to an economy. Worse, there is no discernable effort anywhere in the developed world to reduce those debts.

Our biggest problem is that Western politicians have reached the point where they know the only way to maintain clout is to rely on the power of the printing press to pay for programs that keep the populace relatively happy and compliant. They're egregiously - and immorally - accumulating masses of debt in our names without regard to the true impacts.

But, as I always say, nothing in economics and finance ever happens in a vacuum. There are pipers to pay. And governments around the world face a painful comeuppance.

Because of them, we face a financial crisis that will show the Global Financial Crisis to have been just a foreshock.

I'm not saying such a crisis is imminent. I'm just saying that one is all but assured.

Debt goes away in only one of three ways: It's paid off, written off or the debtor defaults. Given the size of the world's debts, there's no plausible way to pay it off without usurping assets from private citizens (not out of the realm of possibility). The world - especially the West - simply has not the capacity to grow fast enough to generate the tax activity needed to pay down the debt to a sustainable level.

More likely, then, are write-offs and defaults.

And in a fiat-currency world, those solutions come packaged with a crisis-of-confidence among the citizenry who suddenly see that they have every reason to fear politicians with a printing press.

Here's the real problem for you and me: We have no way of knowing when a financial crisis will erupt. We have no way of knowing what event will precipitate the unraveling.

Will the reckoning happen tomorrow? Next week? Next year? 2018?

No one has that answer.

All we can do is prepare.

One Solution

And the only way to prepare is to own gold.

In every financial crisis, gold has served as the ultimate store of value. As archaic as it is - it has been a currency for thousands of years - it will prove once again that it is the only true currency on the planet (that is, until the Chinese release a hard-asset-backed yuan in the new future... but that's a story for another day.)

This isn't just another "buy gold" story.

It's me imploring you to protect your future from what's coming.

As a lifelong world traveler, Jeff Opdyke has been investing directly in the international markets since 1995, making him one of the true pioneers of foreign trading. He is Investment Director for The Sovereign Society and a weekly contributor to The Sovereign Investor Daily.

 

Gold, Best Asset Protection Today!

The world is a volatile place. War. Terrorism. Natural disasters. Roller coaster stock markets. The stress and pressures never seem to go away. You've worked hard and you want to know your hard-earned money is safe from risk. With the possible financial risks increasing by the day, have you given a thought to what the best asset protection is? Maybe you've diversified your assets between stocks, bonds, and real estate. But how about gold? The reasons to own gold are numerous, but the most important thing to remember is it's the only truly safe asset in this financially unstable world.

It's often difficult to read the newspapers or watch the news. Everything seems to be a potential bubble or meltdown waiting to happen. The stock market goes up. The stock market goes down. Banks are either expanding quickly or laying off thousands of people at a time. It used to be a safe bet to diversify your assets by buying real estate, but then the real estate crash happened and all of your holdings are now underwater.

When the real estate market crashed, lots of people decided FX trading was a great bet for financial success. But its risk is also high and the unexpected nature of the world affects this market just as much as others. Currencies go up and down every day. Look at what happened when the Swiss Franc shot up 18% one day and wiped out thousands of people. And the dollar and euro are not as safe as they seem. The US and the EU have amassed enormous debts and the value of their currencies are dependent on the countries that own the debt. Neither currency is safe.

There is one safe way to protect your assets. Gold. Actually, it's the best asset protection. There are many reasons to own gold, but the best reason is it's the original world currency and has been for 5000 years. With that history, you know it's going to be around even when the stock markets crash or the dollar or euro disappears. The reason why it's so great is because it's a commodity. When you buy gold, you buy something that has physical value. Whereas a stock or bond might have value at the moment, gold will always have value. That's why the rich always keep part of their holdings in gold. They use it as an insurance for the unexpected and you should too. It's the perfect way to diversify your assets.

Now that you know the reasons why it's important to own gold, you are ready to protect your finances and learn the ABCs of Gold Investing. It's actually quite easy. You can buy gold bullion or coins online or from a local jeweler. Most people prefer this because they get something physical they can keep in case of emergency. For those who don't want actual gold, it's also possible to invest in gold by buying ETFs that specialize in gold or by buying future contracts in gold. You can also buy stocks in the gold mining companies since their stock prices are usually valued in relation to the value of gold. These options are all great, but gold coins and bullion are always the best asset protection.

The ABCs of Gold Investing is just that easy. Buy gold coins or bullion online or from your local jeweler. Use it to protect your assets and hedge against future disasters. It's the perfect investment. If the stock market crashes, gold still has a value. If the real estate market crashes, gold still has a value. If the dollar or euro suddenly crashes in value, gold still has a value. By buying gold, you are buying a commodity that has a 5000-year history of being the most stable currency in world history. Protect yourself and invest in gold. 

The Truth About China's Gold

For you stock-market buffs, here's a blast from the past: "Plunge Protection Team."

You remember those guys? That's the catchy nickname for a presidential group of officially sanctioned market manipulators who sprung out of Wall Street's 1987 crash, and who have been pulling strings and pushing levers behind the scenes ever since to keep the markets from collapsing.

Well, I'm not sure how to say "plunge protection team" in Chinese, but last week's news makes it clear China has one.

China released its latest data on the amount of gold its central bank is holding. The number was a shocking lie. And what seems clear in this lie is that China only released the data for one reason: to stanch the bloodshed in its stock market.

I will tell you right now that if there's one investment you make this year, it should be gold.

Physical gold.

At just over $1,100 per ounce as I write this, gold prices are at the lowest levels since 2010. The latest move down stems from China's Big Golden Lie...

The country announced last Friday that its official gold holdings now stand at 1,658 tons. That's just 600 tons more than the country supposedly owned in 2009.

It's a lie as big as the country itself.

China now mines more gold than any other country. It has mined more than 2,000 tons of gold since 2009. Much - if not all - of that gold ends up in the People's Bank of China.

And depending on the month, the country is also the No. 1 or No. 2 gold importer. It has imported well over 3,300 tons of gold through Hong Kong. China has also imported nearly 700 tons from Switzerland since January 2012.

And yet the country's official gold holdings increase by just 600 tons?

The math seems askew...

And Then There's This Little Tidbit

Just last month, at the London Bullion Market Forum 2014, the chairman and secretary-general of the China Gold Association announced what should have been shocking news. It proves everything I've been saying for last few years about the massive size of China's gold hoard.

Mr. Zhang's first slide showed that "Since 2009, Chinese gold reserves keep increasing. Successfully breakthrough 7,000 ton, 8,000 ton, 9,000 ton. Till the end of 2014, the gold reserves reach 9,816.03 ton, the world's second." (That's where he ended it, presumably meaning the world's second-largest hoard of gold.)

I've been saying that based on known flows of gold, China has at least 5,000 tons and possibly closer to 10,000 tons. And here's the head of the country's gold association confirming my calculations and suspicions.

And yet the country officially announced just a 600-ton increase that leaves the total hoard six times smaller than what the country's gold association says China really has.

Why?

Plunge Protection Team to the rescue!

A Secret Hedge Against a Dollar Disaster

During the recent Shanghai Stock Exchange implosion, there was an internal call for the government to shore up investor worries, not with empty words but with real action. One of those actions was to increase gold and silver reserves, to show that China's financial system is stable.

Showing an increase in gold would help that cause.

At the same time, the International Monetary Fund (IMF), which wants to add the yuan to a basket of reserve currencies, has been calling on China to update its accounting of its gold reserves, since that figure was last updated six years ago. Again, the latest announcement helps that cause.

But it doesn't address the lie.

Why would China so drastically under-report it's gold?

Two plausible scenarios I can think of:

China doesn't want to unsettle the global currency market by announcing how truly large its gold holdings are. That would call into question the value of U.S. dollars and could be seen as an attack on the dollar. China isn't ready - yet - to rule the roost.

China is preparing for a crisis of confidence in Western currencies, namely the dollar. And it is building a massive store of gold to fend off - and profit from - the storms to come. In a global currency crisis, gold would rise to between $3,000 and $5,000 an ounce, possibly more. The value of China's gold holdings - its real gold holdings - would recoup any losses accumulated in U.S. Treasury debt the country owns.

The Best Insurance Policy

This is the moment to be building your own hoard of gold. Prices are at five-year lows, yet nothing in the world has changed since the end of the global financial crisis.

Indeed, as I will show you Friday, far from deleveraging in the wake of the financial crisis, the world has actually taken on substantially more debt.

This is not a sustainable path.

Buy gold. And as I always say, buy it often. It's your only salvation when the reckoning comes.

As a lifelong world traveler, Jeff Opdyke has been investing directly in the international markets since 1995, making him one of the true pioneers of foreign trading. He is Investment Director for The Sovereign Society and a weekly contributor to The Sovereign Investor Daily.